MOBILE PAYMENT INTEROPERABILITY IN NIGERIA Plotting the Roadmap

MOBILE PAYMENT INTEROPERABILITY IN NIGERIA: Plotting the Roadmap for Success December 2014

The Company NIBSS Plc 2

NIBSS Critical Stakeholder NIBSS is owned by all the Banks in Nigeria and the Central bank of Nigeria. 3

NIBSS Mandate Provides a shared service/infrastructure for the Nigeria financial system 1 A payments processing Company for payments schemes (local & international) in Nigeria, and act as a settlement Company for both inter-bank and interscheme payments 2 3 4 5 Initiates and develops an integrated nationwide network for the electronic or paperless funds transfer and settlement of transactions. Provides framework for elevating the level of efficiency in funds transfer services generally NIBSS commenced operation in June 1994. 4

NIBSS Value Proposition § NIBSS is the central utility for Nigeria Payments System OPERATOR OF THE NIGERIA AUTOMATED CLEARING SYSTEM (NACS) INTER-BANK PAYMENTS AND SETLEMENT SERVICES SHARED SERVICE INFRASTRUCTU RE NIBSS’S VALUE PROPOSITION PAYMENTS TERMINAL SERVICES AGGREGATOR OPERATOR OF THE NIGERIA CENTRAL SWITCH(NCS) E-PAYMENT AND ANCILLARY PRODUCTS & SERVICES NIBSS is a major driver of the Cash-Less Nigeria project and an enabler of e-payments. NIBSS has an established Training Institute. 5

The Nigeria Central Switch and Mobile Payment Interoperability 6

ARCHITECTURE OF THE NIGERIA CENTRAL SWITCH 7

International Remittances Banks Mobile Money Service Providers POS Terminals 8

GUIDELINE ON INTEROPERABILITY - A situation in which payment instruments belonging to a given scheme may be used in systems installed by other schemes. - The BIS Red Book The approved Regulatory Framework for Mobile Payment Services in Nigeria requires all Mobile Payment Schemes to be operable. All are required to connect to the NCS for this purpose. NIBSS has responsibility to provide Interoperability among the licensed Mobile Payment Operators and is pursuing this with vigour 9

OVERVIEW OF TARGETS FOR ACHIEVING INCREASED FINANCIAL INCLUSION Source: CBN National Financial Inclusion Strategy 10

MPO INTEROPERABILITY ONNCS • 18 of the 22 licensed MPOs are connected and operating live with the NCS • NIBSS operates a Mobile Payment Switch which facilitates real-time MPO to MPO, and MPO to DMB fund transfers. • NIBSS is working closely with licensed MPOs and their association, to grow mobile payment adoption in Nigeria 11

VALUE PROPOSITION § The connectivity of MPOs to the NCS provides the following benefits: 1. MPO Interoperability - Fund Transfer Instructions originating from the subscriber of one MPO for the benefit of a subscriber of another MPO - Uniform Merchant codes, to promote purchase 2. Cash-In / Cash-Load services - Payment into mobile wallets from DMB customer accounts 3. Cash-Out / Cash-Unload services - Fund transfers from mobile wallets into DMB customer accounts 4. Settlement Services 5. Industry Payment Analytics Integration of MPOs to the NCS has great potentials of growing mobile payment adoption 12

OTHER VALUE PROPOSITION 1. Mobile e-wallet / ATM integration for card-less cash withdrawal 2. Mobile e-wallet / POS integration for receipt printing 3. Cost-effective link of (multi-operator) Agents to Scheme Operators 4. Electronic Bulk Payments from DMBs into mobile wallets e. g. Salaries 5. Direct Debits for micro-credit operations 6. Shared Agency Network – NCS providing a Single platform or NCS making independent platforms interoperable 7. Facilitate Value-Added Services (e. g. Bill Payment) and other shared service opportunities among MPOs 8. Support for international remittances 13

THERE IS A STRONG COMMERCIAL CASE FOR INTEROPERABILITY 1. 2. 3. 4. 5. 6. 7. The Nigerian society is diverse There is a large population 22 MMOs licensed No single dominant MMO Electronic payment adoption just picking up Mobile Payment adoption is very low MMO infrastructure is expensive, so is Agent recruitment A setting such as this requires MMO Interoperability to grow mobile adoption, grow transaction volumes and revenue for investors in the industry. Also MMOs need to explore and take advantage of other (non -compete) areas of collaboration to succeed – shared dispute resolution system, shared call center, collocation, etc. 14

THANK YOU Nigeria Inter-Bank Settlement System Plc … Improving the Nigeria Payments System 1230 b Ahmadu Bello Way Victoria Island, Lagos, Nigeria Tel: +234 1 2716071 -4 www. nibss-plc. com 15